March 25, 2005


Japan prices post fastest fall in two years (David Pilling, March 25 2005, Financial Times)

Falling utility and telecoms charges pushed prices down by their fastest rate in almost two years in February, underlining the stubbornness of Japanese deflation.

The core consumer price index, which excludes fresh food, fell 0.4 per cent in February from a year earlier, the largest fall since March 2003 when it dropped 0.6 per cent.

Prices in Tokyo, considered an indicator of future price trends, fell 0.5 per cent in March compared with the same month last year, the 66th straight month of decline. Nationwide, consumer prices have been falling for seven years. Measured by the gross domestic product deflator, Japan has been mired in deflation since 1995.

The Bank of Japan is committed to keeping interest rates at zero until the CPI stabilises.

Why would it ever stabilize?

Posted by Orrin Judd at March 25, 2005 5:25 PM
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